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Cyprus peace dividend estimated at 20 bln euros

A Cyprus reunification deal would generate a 20-billion-euro peace dividend for the recession-hit island, according to a study released on Thursday.

The study predicts an elusive United Nations-brokered peace deal would raise per capita incomes by approximately 12,000 euros, expand the size of the economy by around 20 billion euros and add an average 2.8 percentage points to real GDP growth every year for 20 years.

A deal would almost eliminate the per capita income disparity between Turkish Cypriots and relatively more well-off Greek Cypriots, said the study by local economists.

“In the past, the tendency has been to see the costs and benefits of a solution in a static way: There was an appreciation of the immediate costs, but there was little understanding of the dynamic benefits,” said the “Cyprus Peace Dividend Revisited” report.

It was compiled by Cyprus-based economists Fiona Mullen, Alexander Apostolides and Mustafa Besim, and funded by Sweden, Denmark, Finland and Norway.